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Next step for forestry development work

19 December 2005

Next step for forestry development work

A market development grants scheme for the forestry industry is now up and running. It is the latest step taken under the Forest Industry Development Agenda, the Minister of Forestry, Jim Anderton said today.

"The Forest Industry Development Agenda, or 'FIDA', has been underway since April this year. It is a plan to help move the industry forward, lift profitability, employment and investment opportunities," Jim Anderton said.

"This stage opens the door for industry players to access a $2 million per year contestable fund for projects that assist with making the most of market development opportunities. It is a bid-in system whereby industry associations, groups of companies or organisations can submit proposals, which will be assessed against a range of criteria.

"But it isn't a free ride - the industry has to match Government funds on a minimum 25:75 industry to Government ratio" the Minister said.

Applications for the first round close on 6 February 2006. Details are available from Bryan Smith of the Ministry of Agriculture and Forestry, at bryan.smith@maf.govt.nz

Questions and answers

What is the Forest Industry Development Agenda?

FIDA has created a new relationship between the forest and wood processing industry and the Government. It provides a means for the Government and the industry to develop a strategic approach for the industry’s future growth.

Under the FIDA, the Government has made $18.1 million (GST excl) available to develop the industry over a four year period, starting this year (2005/06) with a further $3.8 million (GST excl) contribution expected from industry.

Why is the Government doing this?
The Government’s investment recognises the industry’s significant economic, social and environmental contribution, including in respect of climate change, and its potential to become New Zealand’s number one export earner.

What are the objectives of the FIDA?
The high level objective for the FIDA process is to ensure the forest industry can make its optimal contribution to New Zealand's sustainable development.

It will seek to achieve this objective by pursuing four key outcomes:

- identification and development of a strategy or strategies to address emerging issues affecting or likely to affect the forest industry’s profitable commercial development;

- enhanced collaboration within and between industry and government agencies;
- improved efficiency and effectiveness of government policies, regulations and programmes through the application of a forest industry ‘lens’ to generic policy issues;
- implementation of practical and effective programmes utilising the Government and industry funds made available for the FIDA process.

FIDA is also about enhanced collaboration within and between industry and government agencies. It should help make government policies more effective by ensuring that their impact on the forest and wood processing industries is well thought through.

What is included in FIDA?
The FIDA funding package is worth approximately $18 million (GST excl) spread over 4 years. Areas to be funded are: market access ($1.2 million), market development ($8 million), bio energy ($2.5 million), skills and training ($4.4 million) and wood design ($2.0 million).

Access to the market access and market development funding is dependent on securing industry co-funding of 25 per cent of costs. Industry funding is also expected to contribute to the wood design initiative.

Does FIDA funding meet industry needs?
FIDA presents a good opportunity to make immediate progress on important industry development issues. The areas that have received funding via FIDA include most of the development initiatives that industry has agreed are important. Flexibility has also been provided so that, with the agreement of the Ministers of Forestry and Finance, a portion of the funding for the market development initiative can be transferred to other areas of priority.

Who will decide how the funding is spent?

A Steering Group has been established to provide governance for FIDA. The Steering Group will will provide strategic input and direction for the FIDA process. It will consider and provide advice on any issue it considers significant to the development of the industry.

ENDS

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